Suezmax freight rates to Europe rose sharply over the last week, with the West Africa-to-UKC rate reaching the highest in four months as the flow of Nigerian crudes to Europe picks up, sources said.
S&P Global Platts assessed the WAF-UKC Suezmax dirty freight rate at $9.92/mt Friday. The last time rates were assessed higher than this was on December 20, 2017, when the rate was at $10.13/mt.
The rate for this route has risen sharply of late, rising by $1.98/mt over the last week.
“The length of Nigeria is definitely heading to Europe,” a trader based in the Mediterranean said.
The flow of West Africa crudes to Europe has picked up as demand from more traditional key consumer markets to the east, namely India and China, has fallen in the last two months, sources said.
Nigerian crudes have seen a lot of competition from the flow of sweet crudes from the US and Mediterranean of late, which could cap the flow of WAF crudes to Europe.
Arbitrage flows from the US have been encouraged by the growing spread between crude benchmarks ICE Brent and NYMEX WTI, which has widened amid heightened geopolitical risks and expectations of further increases in US crude production.
The ICE Brent/WTI spread widened to USD 6.55/b on Thursday, a year-to-date high, and was little changed Friday.
Sea News, May 1